BCG Transform Index:
Switzerland
Financial study on sector performance
MAY, 2023

Disclaimer
The basis for this study is a data set extracted from Capital IQ for companies listed on European stock
exchanges with a minimum revenue of €500 million
Companies from the financial industry and Ukraine/Russia are excluded

The analysis covers data from 2018 through the last twelve months (LTM)
LTM refers to available data from Q4-2021 through Q3-2022
The ranking is based on a comparison with other industries within the same country
Please note that the statements made relate specifically to this data set
1Copyright © 2023 by Boston Consulting Group. All rights reserved.

Our data set includes 1,373 European companies, of which 95 are from Switzerland, that meet these selection
criteria•

Most resilient
sectors

Most impacted
sectors

Rankingcompared with
European average
BCG
recommendation
Source: BCG Analysis

The Chemicals sector scores highly in profitability and financial stability, benefitting from the industry's
high degree of diversification that stems from the wide range of application fields of its products•The Metals & Mining sector scores highly in solvency and financial stability, capitalizing on the surging
demand after the pandemic and price increase from constrained supply in recent past•

Although the Industrials sector exhibits poor financial stability, it shows high profitability and solvency due
to high-quality manufacturing, innovative potential, and strong infrastructure enabling efficient operations•

The Automotive sector struggles primarily in profitability and financial stability which can be traced back tothe sample being solely comprised of automotive suppliers that suffer disproportionally from rising inflation•Despite strong scores in financial stability and decent profitability, the Health Care sector struggles insolvency, most likely due to higher input prices and major upfront investments•The Consumer sector grapples particularly with issues concerning profitability, facing challenges fromstrong competition and opportunistic consumer spend behaviour•

The Leisure and Tourism sector has fared better in Switzerland compared with other European countries
due to diversified tourism offerings, strong marketing efforts and strong reputation for safety and reliability•The Swiss Automotive industry has been severely affected in recent years due to the low bargaining powerof its automotive supplier companies that are not able to pass on mounting input prices to OEMs

In the context of persistent crises, companies cannot continue to remain in a reactive firefighting mode, butrather must focus on proactively seizing opportunities supported by an adaptable cost structure (that fitsearnings), a strong financial position, and an adjusted go-to-market strategy. In a nutshell: Resilience is key tobeing successful

Take-aways
Operational view
Post-pandemic, revenue is on the rise
across all sectors, and for more thanhalf of the sectors EBITDA margins
have returned to pre-Covid levels.
However, the momentum for profit
growth is now waning, with EBITDA
margins slightly declining in LTM—atrend that is evident in the European
area as wellSolvency
The proportion of Swiss companies
with negative free cashflow has risen
steeply in LTM, reaching 21%, which isbelow the European average of 27%

Financial stability
In 2019 and in LTM, the net debt
increased significantly reaching a
notably higher level compared withthe baseline in 2018. Unlike other
European countries, there has notbeen much change in the proportionof investment-grade debt since 2018.
In LTM, 88%% of the debt is investment
grade, which is a higher percentage
than the European average of 45%
2Copyright © 2023 by Boston Consulting Group. All rights reserved.

Sector performance and resilience in the face of past andprevailing crises

Sectors providing essential inputs for industrial production have proven to beresilient; Leisure and Tourism is notably outperforming the European average

12
3
4
5

Chemicals
Metals & Mining

Metals & Mining
ChemicalsIndustrials
EnergyLeisure & Tourism
Automotive

EnergyOthersProfitability

SolvencyFinancial
stability

86102441092399321104620

74516SUM

Industry position in the European ranking
Note: A ranking was assigned to each industry based on its performance in three dimensions. The detailed ranking methodology can be found in the appendix
Source: Capital IQ, BCG analysis

3Copyright © 2023 by Boston Consulting Group. All rights reserved.

Points given for industry performance in three dimensions

The Swiss Automotive sector performs well below the European average andhas been significantly impacted by the pandemic

678910TMTIndustrials

Consumer
Health Care

Health Care
Consumer

Other
TMT

Automotive
Leisure & Tourism

Profitability

Solvency

Financialstability

54716385166

1815263111

73

11

SUM

Industry position in the European ranking
Note: A ranking was assigned to each industry based on its performance in three dimensions. The detailed ranking methodology can be found in the appendix; If the same total score isexhibited by two or more sectors, the industry with the better score in profitability is ranked higher; Source: Capital IQ, BCG analysis

4Copyright © 2023 by Boston Consulting Group. All rights reserved.

Points given for industry performance in three dimensions

Operational view | Although overall revenue and EBITDA levels have surpassed
the pre-pandemic baseline, profitability has deteriorated in LTM
EBITDA margin in Switzerland in %, 2018–LTM

6.6%
470
3
1406

17112
90
2742-6.8%5013150
177122
95031

2018

11.9%

2743037

2019

Note: LTM = LTM Q3-2022
Source: Capital IQ, BCG Analysis

467
3135
71912187
24385073142
2171301041322840130584
3165
925

1438%

18%18%
26%
32%

12633
45

1
33

0.5%

3.6%

11%

16%
17%
16%
7%

18%

6%

19%
24%
33%
11%
18%
7%

9%
13%

6%
16%
20%

8%

18%

7%

19%

26%

22%

23%

35%

33%

34%

10%

13%
23%

13%
23%

19%

17%
18%
8%

28%
18%
16%
7%

8%

2020

2021

2021

LTM

Automotive

Chemicals

Health Care

Leisure and Tourism

TMT

Consumer

EnergyIndustrials

Metals & Mining, Const. Mat.

Other

2019

17%

20%

2020

2018

-1.9%

19%

LTM

5Copyright © 2023 by Boston Consulting Group. All rights reserved.

Revenue in Switzerland in bn EUR, 2018–LTM

Solvency | After a steep rise in 2021, 21% of Swiss companies have negative
FCF, although this figure remains lower than the European average
Distribution of companies with negative/positive FCF in 2021 and LTM

LTM

1744

1232

75%

83%

25%

17%

6%

4

12

32

92%

81%

8%

19%

2

2

13

100%

100%

0%

0%

22

13

6

100%

100%

77%

67%

0%

0%

23%

33%

50%

667%

100%

88%

11%

0%

12%

0%

95

3

17

4

79%

67%

65%

21%

33%

35%

Automotive

Consumer

Chemicals

EnergyHealth Care

Industrials

Leisure andTourism

Metals &Mining,
Const. Mat.

TMTOther48%

28%

28%

31%

21%

29%

16%

32%

22%

16%

89%

2021

3100%

100%
0%

75%
25%

94%
50%

33%

Total

Europeanbenchmark fornegative FCF in LTM
Positive FCF

27%

Negative FCF

Source: Capital IQ, BCG Analysis

6Copyright © 2023 by Boston Consulting Group. All rights reserved.

95

Financial stability | Despite a sharp increase in net debt over the LTM, theshare of investment-grade debt is marginally higher than pre-pandemic levels
Net debt by rating1 in CH in % and bn EUR, 2018–LTMNet debt in CH in billion EUR, 2018–LTM14936.4%

87112532
5133076103991320929481104114

10388824012088%

39711654

176262421094087186%

-1

2021

83%

85%

347780%8079LTM

5%

10%
2018

2018

2019

2020

Automotive

Chemicals

Health Care

Leisure and Tourism

TMT

Consumer

EnergyIndustrials

Metals & Mining, Const. Mat.

Other

4%
16%
2019

17%

0%
14%

1%

2020

2021

Investment Grade

Mid-Grade

10%

2%

LTM

Sub-Performing

1. The ratings are based on the Net Debt/EBITDA leverage measure. Debt with a Net Debt/EBITDA ratio below 3.5 is considered investment grade, while debt with a ratio between 3.5 and
4.5 is classified as mid-grade. If the ratio exceeds 4.5, it is considered sub-performing debt. If EBITDA is negative, net debt is automatically classified as sub-performing.
7
Source: Capital IQ, BCG Analysis

Copyright © 2023 by Boston Consulting Group. All rights reserved.

104

7135

-2.6%

19.2%

Your BCG Transform spokespeople for Switzerland

Jochen Schönfelder

Max Lieber

Pierre Laugeri

Sabri Gasmi

Managing Director and Senior Partner,

Partner,Partner and Director,Principal,

BCG Transform

BCG Transform

BCG Transform

BCG Transform

CologneZurich

GenevaGeneva8Copyright © 2023 by Boston Consulting Group. All rights reserved.

TRF nodes

9Copyright © 2023 by Boston Consulting Group. All rights reserved.

Appendix

BackupProfitability

Solvency

Financial stability

Total ranking

The profitability ranking isbased on EBITDA growth
between 2019 and LTM, withthe industry having the lowest
EBITDA growth being assigned
the fewest points (1) and theindustry with strongest EBITDA
growth the most points (10)The solvency ranking is basedon the growth sector's overall
cash account LTM, thepercentage of companies withgrowth in cash LTM, and theinterest coverage ratio, withthe worst overall performanceassigned the fewest points (1point) and the strongest themost points (10)The financial stability
ranking is based on the LTM
equity ratio and net debt rank,which is determined by
the proportion of mid-grade
and sub-performing debt, withthe worst overall performanceassigned the fewest points andthe strongest the most points

Once the points for eachdimension have been
determined, a total ranking
score is calculated by summing
the points of each dimension.
The highest sum of points
indicates the best
performance, the lowest thepoorest performance

10Copyright © 2023 by Boston Consulting Group. All rights reserved.

Ranking methodology

Backup

Number of Swiss companies within each industry in the underlying database95• Companies listed
on European stock
exchange with atleast €500M
revenues

32
17
3

4

Automotive Consumer Chemicals

Source: Capital IQ, BCG Analysis

13

12
4

EnergyHealthCare

Industrials

22LeisureandTourism

Metals& Mining,Const. Mat.

6TMT• Financial industryand companies
from Ukraine andRussia excluded

Other

11Copyright © 2023 by Boston Consulting Group. All rights reserved.

Selection criteria:

Backup

The data set consists of European companies that meet the selection criteria
for this study
1,373
244

105
78

28

39

43

35
27 12 3

238
16

5632
1255

51 45
2115

8

1

38
Total

Count ofcompanies
that meetselectioncriteria

6895

Source: Capital IQ, BCG

12Copyright © 2023 by Boston Consulting Group. All rights reserved.

159 164

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